According to Treasury Secretary Janet Yellen, the Joe Biden administration is now proposing taxing nonexistent profits through capital gains. The new proposal, which Yellen unveiled on CNN Sunday, would force people to pay a tax on their investments that have increased in value, even if they didn’t cash those investments out.
Although Yellen insists the tax would only apply to “exceptionally wealthy individuals,” many have questions on who exactly will fall into this category. So, billionaires like Amazon’s Jeff Bezos or Tesla’s Elon Musk would have to pay taxes on their stock increases, even though they are not cashing out or “realizing” a gain on their assets.
According to Henry Olsen of the Washington Post:
Expensive assets can go down in value, too, and billionaires would rightly insist that the IRS account for those reversals of fortune. This would lead to some politically uncomfortable acts if, say, a market downturn coincides with the end of the tax year, as happened during the Great Recession. The U.S. stock market declined by roughly a third in 2008, with the low point at year’s end — exactly when valuations for an unrealized gain tax would be determined. This would have led to billionaires marking up massive amounts of unrealized losses. Would the IRS have to issue multi-billion dollar refund checks to return the billionaires’ quarterly estimated tax payments from earlier in the year? No president will want to be in charge when their IRS has to give billions of dollars back to Warren Buffett or Bill Gates.
Even Olsen agrees, “it will only be a matter of time before lawmakers apply the tax to ordinary Americans. Anyone who owns a house or has a retirement account has unrealized capital gains.”
Even though the Constitution clearly states “income” may be taxed, this proposal could very well be unconstitutional. Despite that, if it is allowed to go forward, not only will costs of goods and services owned by billionaires skyrocket, people who are not billionaires may soon be subjected to the same “unrealized” taxes on capital gains, harming Americans who are already suffering due to increased prices on everything from gasoline to lumber and food.
How can you tax something that is not there, that is worse than STUPID. But the putz in the WH thinks he can do anything.
globalist puppet chester biden obeys all globalist agendas that globalists and globalist puppet $oro$ orders him .
Yellen, the Communist, should be booted out of the Treasury right along with Biden from the White House….then Kamala, Pelosi, “The Squat”-aka “The Squad”, Maxi-pad Waters,
Up-chuck Schumer and numerous other current administration people…ALL possible by voting in 2022 and throwing the Dems out of the House and Senate!!
These people are fools. If you voted for Biden I would suggest that you sit out the next few elections to give your brain a chance to develop.
Joe Bidens administration is not qualified to make decisions for America
Capital gains taxation is already screwed up…. if you have a $21,000 capital gain, it is taxed… no problem there But if you have a loss of $21,000 it takes you 3 years to write it off (unless you have additional gains to offset it. Are they going to correct this unbalance if they go after unrealized gains?
Further, most taxpayers report on a cash basis of accounting. Your final paycheck of the year is not issued until Year 2… it is therefore taxable in year 2 even though it was earned in year 1. Taxing unrealized capital gains upends this basis of accounting.
There is an old adage… what goes up must come down. Taxing increases by definition demands that losses are treated in the same manner. It is a bad idea with unintended consequences…. something these boneheads seem incapable of understanding.
Originally there were tax territories: Fed – Income tax, State – sales tax, County and City – real estate tax. Now all three taxing bodies are into the other territories. I don’t think this is what the Founding Fathers had in mind. They had a tea party for a lot less reason.